N.Y. Estates, Powers & Trusts Law § 11-1.2: Tax elections by personal representatives

§ 11-1.2 Tax elections by personal representatives

(A) If the personal representative or other person acting in a

fiduciary capacity with respect to a decedent's estate, hereinafter

called the "fiduciary", claims as income tax reductions administration

expenses chargeable to principal that may be claimed by such fiduciary

as either estate tax deductions or as income tax deductions with the

result that the income taxes paid by or chargeable to income or to any

income beneficiary are reduced and with the further result that United

States or New York estate taxes chargeable to principal are increased,

then, unless otherwise provided or authorized by the decedent's will,

each person, including the estate or any trust, who has received the use

of such income tax deductions shall reimburse to the principal

chargeable with such increased estate taxes an amount determined by

multiplying such increase in estate taxes by a fraction having a

numerator equal to the income tax deduction made available to him as the

result of the aforesaid election and a denominator equal to the total

amount of the income tax deductions made available thereby.

(b) Unless otherwise expressly provided by a will under which a

disposition is made to or for the benefit of the surviving spouse of a

decedent which qualifies for an estate tax marital deduction under any

tax law of the state of New York or of the United States and the amount

or size of such disposition is defined by the will in terms of the

maximum marital deduction allowable under such tax law:

(1) No adjustment shall be required to be made between such

disposition and the other interests in the decedent's estate by reason

of (A) any increase in the amount or size of such disposition resulting

from any election by the fiduciary, under such tax laws, to treat estate

administration expenses as income tax deductions over the amount or size

of such disposition had the contrary election been made or (B) any

increase or decrease in the amount or size of such disposition resulting

from an election by the fiduciary, under such tax laws, of an estate tax

valuation date other than the date of the decedent's death as compared

with the amount or size of such disposition had the contrary election

been made.

(2) Such definition shall not be construed as a direction by the

decedent to the fiduciary to exercise any election respecting the

deduction of estate administration expenses or the determination of the

estate tax valuation date, which the fiduciary may have under such tax

laws, only in such manner as will result in a larger allowable estate

tax marital deduction than if the contrary election had been made.